Bank of the Ryukyus Management Briefing for FY2014

Transcription

1 Bank of the Ryukyus Management Briefing for FY2014 By Chie Tengan Winner of the 23nd (fiscal 2014) Bingata Design Contest presented by the Bank of the Ryukyus

2 The Financial and Economic Environment of Okinawa Prefecture

3 Overview of Okinawa Prefecture Forecast rate of economic growth 1.07% (highest in Japan: forecast rate of real economic growth (Japan Center for Economic Research)) Prefectural Income (per person) 2.03 million (worst in Japan, 2012) * National average: 2.97 million Population growth rate 0.44% (Ranked second in Japan, 2013) * No. 1 ranked Tokyo: 0.53% Savings per Household 6.28 million (worst in Japan, 2014) * No. 1 ranked Tokyo Metropolitan Area: million National average: million Divorce Rate * Per 1,000 of population 2.59 divorces (worst in Japan, 2013) Sources: Okinawa Prefecture, Cabinet Office, Ministry of Internal Affairs and Communications 1% Economy Japanese Resorts (Source: ALL NIPPON AIRWAYS CO., LTD) Global Resorts Beach Resorts & Business Resorts

4 Regional Economic Climate Chart (May 2015) May ~ May Personal consumption Residential construction Facility investment Public works Exports Production activities Tourism Employment conditions HOKKAIDO AREA TOHOKU AREA KANTO ARE KOSHINETSU AREA HOKURIKU AREA TOKAI AREA KINKI AREA CHUGOKU AREA SHIKOKU AREA KYUSYU AREA OKINAWA PREFECTURE Source: Regional Banks Association of Japan

5 Economic Trends (Bank of Japan Tankan) Level exceeded 20 over five periods for first time in 23 years ( Business condition diffusion index : Strong-Week) 40 Bank of Japan Tankan Japan Okinawa Mar Mar Feb. 92 Feb. 93 Feb. 94 Feb. 95 Feb. 96 Mar. 97 Mar. 98 Mar. 99 Mar. 00 Mar. 01 Mar. 02 Mar. 03 Mar. 04 Mar. 05 Mar. 06 Mar. 07 Mar. 08 Mar. 09 Mar. 10 Mar. 11 Mar. 12 Mar. 13 Mar. 14 Mar. 15 * Drawn up using new base numerical values from December 2014 Source: Bank of Japan, Naha Branch

6 Projected Population Okinawa Prefecture s population is projected to increase for the foreseeable future ( 1995= 100) Projected Population Japan Okinawa Peak Years (Source: Prepared from census figures provided by Japan s Ministry of Internal Affairs and Communications through to 2010 as well as estimates for 2015 and beyond provided by the National Institute of Population and Social Security Research)

7 Projected Population Working-Age Population Already in Decline (Persons) 1,600,000 1,400,000 Okinawa Prefecture Popuration Trends Actual values Estimated value Total population 1,200,000 1,000, ,000 Working-age population 600, ,000 Elderly population 200,000 0 Youth population (References) Compiled from National Population Census (Ministry of Internal Affairs and Communications), Regional Population Projections for Japan, March 2013 projections (National Institute of Population and Social Security Research)

8 Employment Improving trend in Employment 9.0% Trends in the overall unemployment rate 8.0% Japan Okinawa Aeon Mall Okinawa Rycom opened April 25, % 6.0% 5.4% 5.0% 4.0% 3.6% 3.0% 2.0% 1.0% 0.0% (Source: Labor force survey by Japan s Ministry of Internal Affairs and Communications)

9 Trends in Land Prices Upward trend in prices within the Prefecture for both commercial- and residential-use land Commercial-use land (YoY) Residential-use land (YoY) 14.0% Japan Okinawa 14.0% Japan Okinawa 12.0% 12.0% 10.0% 10.0% 8.0% 8.0% 6.0% 6.0% 4.0% 4.0% 2.0% +0.8% 2.0% +0.6% 0.0% 0.0% -2.0% 0.0% -2.0% -0.4% -4.0% -4.0% -6.0% -6.0% -8.0% -8.0% -10.0% -10.0% -12.0% Jan.1991 Jan.1994 Jan.1997 Jan.2000 Jan.2003 Jan.2006 Jan.2009 Jan.2012 Jan % Jan.1991 Jan.1994 Jan.1997 Jan.2000 Jan.2003 Jan.2006 Jan.2009 Jan.2012 Jan.2015 (Source: Land prices published by Japan s Ministry of Land, Infrastructure, Transport and Tourism)

10 Long-Term Forecasts for Tourists from Overseas In 2013, the global number of overseas tourists is expected to reach 180 million (Millions) 2,000 1,800 1,600 1,400 1,200 1, Actual and forecast numbers of international tourists by arrival point Middle East Africa America Asia-Pacific Europe Actual values 1, Estimated values 1, (Source) United Nations World Tourism Organization (UNWTO)

11 Tourism For two years in succession, visitor numbers to Okinawa have been all-time highs of more than 7 million! (Thousands) 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2, ,046 5,793 (95.8%) Visitors from overseas (Left scale) Visitors from other parts of Japan (Left scale) Revenues from tourism (Right scale) ,650 5, ,855 5,570 (95.9%) (95.1%) ,415 5,135 (94.8%) ,835 5,459 (93.5%) ,413 5,862 (91.4%)? 7,058 6,164 (87.3%) (Billions of Yen) , (4.2%) 230 (4.1%) 284 (4.9%) (5.2%) (6.5%) * Figures inside ( ) show rate of increase (Source: Statistical overview of the number of tourists entering Okinawa Prefecture) 550 (8.6%) 893 (12.7%) 50 0

12 Financial Results for FY2014

13 Financial Highlights Results On On consolidated consolidated basis, basis, record record highs highs for for ordinary ordinary revenue/ordinary revenue/ordinary income income On On non-consolidated non-consolidated basis, basis, increased increased revenue revenue and and earnings earnings for for two two consecutive consecutive periods periods Dividends Dividend Dividend increase increase planned planned for for first first time time in in four four years years Annual Annual cash cash dividend dividend of of yen yen per per share share (increase (increase of of 5 5 yen) yen) Topics Ryukyu Ryukyu Leasing Leasing Co., Co., Ltd. Ltd. made made into into consolidated consolidated subsidiary subsidiary Loan Loan interest interest increased increased for for first first time time in in five five periods periods Consolidated Consolidated net net income income for for fiscal fiscal year year ending ending March March expected expected to to be be all-time all-time high high * The above-mentioned consolidated net income for fiscal year ending March 2016 is net income for the period attributable to parent company shareholders.

14 Factors Contributing to Non-consolidated /Consolidated Differences in Net Income for Current Fiscal Year Non-consolidated/consolidated scale factor attributable to making Ryukyu Leasing a consolidated subsidiary: 1.29 times (Millions of Yen) Factors Contributing to Non-consolidated/Consolidated Differences in Net Income for Current Fiscal Year ,296 1,067 Total profit from subsidiaries Gain on negative goodwill Minority interest Others 5, ,257 million Non-connsoridated Connsoridated

15 Factors Behind the Change in Net Income (Non-Consolidated) Increase in earnings due to such factors as increase in net business profits, decrease in credit limit costs (Billions of Yen) 6 Factors Behind the Change in Net Income (Non-Consolidated) (Millions of Yen) , Decrease in net credit costs 603 Increase in real net business profit Improvement in gains/losses on shares Others -808 Increase in total income taxes 4,296 0 End Mar.'11 End Mar.'12 End Mar.'13 End Mar.'14 End Mar.'15 End Mar.' million End Mar.'15

16 Factors Behind the Change in Real Net Business Profit (Non-Consolidated) Four consecutive periods of increases due to such factors as increases in interest and dividends on securities (Billions of Yen) ,564 Factors Behind the Change in Real Net Business Profit (Non-Consolidated) Increase in interest and dividend income on securities 217 Increase in service profit Increase in interest on loans and bills discounted Decrease in interest on deposits Others Increase in expenses (Millions of Yen) 9, End Mar.'11 End Mar.'12 End Mar.'13 End Mar.'14 End Mar.'15 End Mar.' million End Mar.'15

17 Loans (Non-Consolidated) Favorable increases in both private and corporate businesses (Billion of Yen) Loans (Non-Consolidated) 1,400 1,200 1, , , , , , , Local public authorities and other 1, Corporations Indiv iduals 0 End Mar.'10 End Mar.'11 End Mar.'12 End Mar.'13 End Mar.'14 End Mar.'15

18 Business Loans (Non-Consolidated) Increase mainly in loans to the real estate sector including apartment loans as well as the medical and welfare sector Business Loans (Non-Consolidated) Real estate, rental and leasing Wholesale and retail Construction Medical and welfare Manufacturing Others (Billions of Yen) 1, , Medical and welfare Real estate, rental and leasing 0 End Mar.'10 End Mar.'11 End Mar.'12 End Mar.'13 End Mar.'14 End Mar.'15 * Individual business loans are handled in a different manner and as such data does not reconcile with data for loans to corporations on page 16

19 Estimates of the Number of Households Continued increase in the number of households Estimates of the Number of Households ( 1995= 100) Japan Okinawa Peak (Source: Prepared from estimates as of March 2014 provided by the National Institute of Population and Social Security Research)

20 Consumer Loans (Non-Consolidated) Favorable increase due to sales of new products and other factors (Billions of Yen) Consumer Loans (Non-Consolidated) (0.2%) ( 0.3%) (0.7%) (2.3%) (6.3%) (8.5%) Other loans (4.3%) (4.2%) (7.3%) (6.7%) (5.5%) (4.0%) Mortgage loans 50 0 End Mar.'10 End Mar.'11 End Mar.'12 End Mar.'13 End Mar.'14 End Mar.'15 * Data does not include individual business loans and as such does not reconcile with data for loans to individuals on page 16 * Figures inside ( ) show rate of increase

21 Deposits (Non-Consolidated) Increases in personal, corporate and public funds, exceeding 1,900 billion yen (Billions of Yen) Deposits (Non-Consolidated) 2,200 2,000 1,800 1,600 1,400 1,200 (7.3%) 1, (7.7%) 1, (2.2%) (7.2%) 1, , (4.7%) 1, (4.5%) 1, Public funds Corporations 1, , , , , , ,585 Individuals End Mar.'10 End Mar.'11 End Mar.'12 End Mar.'13 End Mar.'14 End Mar.'15 * Figures inside ( ) show rate of increase

22 Assets in Custody (Non-Consolidated) Balance of assets in custody increased due to favorable sales of insurance and investment trusts (Billions of Yen) Aggregation method for single-premium insurance Cumulative sales total Balance (7.5%) 64.5 (25.0%) Single-premium insurance (13.6%) Investment trusts ( 26.0%) End Mar.'10 End Mar.'11 End Mar.'12 End Mar.'13 End Mar.'14 End Mar.'15 JGBs * Single-premium insurance: Contract value of single-premium individual pension insurance, single-premium whole life insurance, and single-premium medical care insurance * Not simply comparable as the aggregation method for single-premium insurance up to and including March 31, 2012, was different to that from March 31, 2013, onward * Figure within ( ) for March 31, 2014, shows rate of increase

23 Securities (Non-Consolidated) Balance buildup while operations diversified ( Billions of Yen) Securities (Non-Consolidated) Other (foreign bonds, etc.) 19.4 Local government bonds Bonds JGBs 0 End Mar.'10 End Mar.'11 End Mar.'12 End Mar.'13 End Mar.'14 End Mar.'15

24 Earnings Forecasts for FY2015 (Non-Consolidated) Four consecutive periods of increased earnings forecast for current fiscal year (Billions of Yen) Ordinary revenue Ordinary profit Net income 0.0 FY2011 FY2012 FY2013 FY2014 FY2015 (Forecasts)

25 Earnings Forecasts for FY2015 (Consolidated) Significant increase in earnings ultimately expected following the making of OCS, Ltd. into a subsidiary (Billions of Yen) Ordinary revenue Ordinary profit FY2011 FY2012 FY2013 FY2014 FY2015 (Forecasts) 9.9 Net income * Consolidated net income for fiscal year ending March 2016 is net income for the period attributable to parent company shareholders.

26 Bank of the Ryukyus Strategy

27 Long-Term Vision By providing value that is unmatched by other financial institutions and unique to us, we aim to remain the Bank of the Ryukyus Group that is our customers bank of preference and enjoys the overwhelming support of the local community. Speed The Bank of the Ryukyus Group that is our customers bank of preference and enjoys the overwhelming support of the local community. Providing zero lead-time services Providing Our Customers with the Three S s (Value) Solution Sympathy Unique solutions from a bank that possesses local knowledge A partner that sympathizes with customers thoughts and feelings

28 Strategic Systems Management Philosophy A bank that is cherished and enjoys the trust of those in the local area and contributes to the development of local communities Long-Term Vision While providing the three S s, the Bank of the Ryukyus Group is our customers bank of preference and enjoys the overwhelming support of the local community New Medium-Term Management Plan Speed Solution Sympathy Shared Value Establishing value provided to customers by displaying the Group s comprehensive capabilities- (April 2015 to March 2018) Growth Strategies Promote comprehensive trading by building solid customer relations Capability Strategy Rebuild value creation capabilities by strengthening IT/human resources, etc. Firm stance on compliance with laws, etc., strengthening of risk management, governance

29 New Medium-Term Management Plan (April 2015 to March 2018) Shared Value Establishing value provided to customers by displaying the Group s comprehensive capabilities- Corporate Business Strategy Provide growth-field support and comprehensive solutions Growth Strategies Promote comprehensive trading by building solid customer relations Individual Business Strategy Establish life-plan sales stance by omni-channel processes Group Strategy Provide one-stop services that leverage Group capabilities- Boost growth strategies Create business opportunities that utilize information Review BPR/organizations from perspectives that maximize customer relations Organizational / Business Process Reengineering (BPR) Strategy IT/Sales Information Strategy Capability Strategy Rebuild value creation capabilities by strengthening IT/human resources, etc. Strategic rebuilding of human resources and promotion of diversity Human Resource Strategy

30 Medical/Welfare Field (Corporate Business Strategy) Based on declining birth rate and growing proportion of elderly people, strengthen support systems geared toward medical/welfare field Trends in Outstanding Loans for Medical/Welfare Field Development of Human Resources Familiar with Medical Management (Billions of Yen) In top class of nationwide banks in terms of number of holders of medical manager examination qualifications Medical and Welfare Promotion Group established December Holding of Medical Seminars End Mar.'10 End Mar.'11 End Mar.'12 End Mar.'13 End Mar.'14

31 Support for Ryugin Sixth Industrialization Fund (Corporate Business Strategy) Proactively support business development, etc. by Ryugin Sixth Industrialization Fund Fund Composition Bank of the Ryukyus Agriculture, Forestry and Fisheries Fund Corporation for Innovation, Value-chain and Expansion Japan (A-FIVE) Yamada Business Consulting Co., Ltd. Capital injection Ryugin Sixth Industrialization Fund 500 million First Project Utilizing the manufacture and sale of Japanese food for followers of Islam as well as logistics hub to export to Southeast Asia Agricultural, forestry, and fishery business operators Partner corporations Holding of Seminars Seminars held at five venues in Okinawa, including Sakishima Islands 2nd There is still time! Agricultural Business Revitalization Seminars Ryugin Sixth Industrialization Fund and Halal Market NOMURA Agri-Planning and Advisory Moku Moku Rural Industry Research Laboratories Co., Ltd.

32 Support for Manufacturing (Corporate Business Strategy) Injection of capital into fund to support manufacturing industry development in Okinawa Okinawa Manufacturing Promotion Fund State Subsidies Prefecture Assistance payments Public corporation Limited liability association member Bank of the Ryukyus Three other Okinawa banks for deposits Collaboration Capital injection Okinawa Manufacturing Promotion Fund 1,525 million Capital injection Management support First Project Point Pyuru Company Limited Strengthening domestic and overseas sales of mainstay products from Okinawa Prefecture and natural cosmetic products from Kume Island Collaboration Experts from Okinawa/outside Okinawa

33 Industry-Academia Collaboration (Corporate Business Strategy) Utilizing Bank of the Ryukyus networks to match University of the Ryukyus with local companies Industry-Academia-Government Partnership Agreement with University of the Ryukyus Seeds of Each Faculty s Research Sales Store Trading Needs I want to make use of my foreign language knowledge Find out about latest management strategies/theories I need personnel capable of dealing with overseas customers I want to boost sales Provision of new technologies/intellectual property I want the latest technology Okinawa-based Organization for the Promotion of Industry, University and Government Collaboration Bank of the Ryukyus Consulting Sales Department First Project in Okinawa Zero-emission Technology Okinawa Areas of joint research: Objectives New products, business creation, human resource hiring Composition (mixing) of concrete repair material made with fly ash (coal ash) and performance-related research, including resistance to salt damage

34 Sales Channel Expansion Support (Corporate Business Strategy) Support for overseas development by joint holding of business forum by three Okinawan financial institutions Third Business Forum to Convey Okinawa s Culinary and Visual Charms Held June 4 Overview Participating companies Invited buyers 68 Companies Operators of food-related businesses 49 Tourism company operators Companies Operators of food-related businesses 26 Tourism company operators 3

35 Overseas Networks Building frameworks capable of responding to various overseas development needs Overseas development support Tokio Marine & Nichido Fire Insurance Co., Ltd. Tokio Marine & Nichido Fire Insurance Co., Ltd. Halal Japan Business Association Halal business support Mitsui Sumitomo Insurance Company, Limited Mitsui Sumitomo Insurance Company, Limited Brand Research Institute, Inc. Brand Research Institute, Inc. Aioi Nissay Dowa Insurance Co.,Ltd Aioi Nissay Dowa Insurance Co.,Ltd MHC Co., Ltd. MHC Co., Ltd. DBJ Asia Financial Support Center Nippon Asia Halal Association Nippon Export and Investment Insurance Kasikornbank PCL. (Thailand) Okinawa Prefectural Government Okinawa Prefectural Government Hong Kong Representative Office Hong Kong Representative Office Bank of the Ryukyus Metropolitan Bank and Trust Metropolitan Bank and Trust Company (Philippines) Company (Philippines) Okinawa Prefectural International Okinawa Prefectural International Logistics and Commerce Division Logistics and Commerce Division Joint Stock Commercial Bank for Foreign Trade of Vietnam Employee dispatch JETRO Singapore Representative Office Chinatrust Financial Holding Co.,Ltd (Taiwan) Foreign bank partners

36 Expansion of Product/Service Lineups (Individual Business Strategy) Expansion of product/service lineups in tune with customers varying life plans Products that meet customer needs An Okinawan Bank First! Cashback loan sales commenced January 2015! An Okinawan Bank First! Reverse mortgage sales commenced March 2015!! An Okinawan Bank First! Hugely Popular Pet insurance sales commenced June 2015!!!

37 Group Strategy Provide comprehensive services that leverage Group capabilities Ryugin DC Co., Ltd. Ryugin Research Institute., Ltd. Ryugin Business Service Co., Ltd. Ryugin Hosho Co., Ltd. April 2014 Ryugin Hosho Co., Ltd. made wholly owned subsidiary April 2014 Ryukyu Leasing Co., Ltd. made consolidated subsidiary Ryugin Office Service Co., Ltd.* Ryukyu Leasing Co., Ltd. April 2015 Okinawa Credit Service Co., Ltd. made wholly owned subsidiary Okinawa Credit Service Co., Ltd.

38 IT/Sales Information Strategy Evolution of One-to-One marketing Mobile PC Multi-Channel Tel April 2015 Introduction of mobile printers From February 2014 Distribution of ipad600 devices SNS Range of workplaces Sales support systems May 2014 BankNeo sales support system fully operational May 2015 Ryugin Azukari Archive fully operational at all branches Home visits Omni-Channel Seminar Branch / Loan Center

39 Organizational/Business Process Reengineering (BPR) Strategy Develop branches that make customers feel at home Makabi Branch opened March 2013 Café Style Ohjana Branch opened February 2015 Chatan Loan Center opened September 2013

40 Human Resource Strategy Train human resources who have provided expertise based on high level of their capabilities 140 (Staff) Trends in Numbers of Professionally Qualified Personnel Agricultural Management Adv isors 3 Azukari Archive Meisters 25 Personal Property Assessment Advisors Medical Management Consultants Small/Medium Enterprise Consultants Of the 10 award winners in fiscal 2014, seven were women Dispatch of individual award winners for overseas training 57 FP1 Class End Mar.'12 End Mar.'13 End Mar.'14 End Mar.'15

41 About This Presentation All enquiries regarding this presentation should be addressed to: Bank of the Ryukyus,Limited General Planning Department Telephone: Fax: The information in this presentation is on a non-consolidated basis unless otherwise specified. Information is based on summaries of published data, and some totals presented in this presentation may not add up due to rounding. This material contains information about the future(forward-looking information)such as forecasts, outlooks, objectives and plans concerning the Bank. The forward-looking information was created based on information available as of May 14,2015 and does not represent a guarantee of future performance. Certain assumptions and hypotheses are used for the description of forward-looking information, but these assumptions and hypotheses could be inaccurate from an objective perspective and may not materialize in the future. Forward-looking information involves risks and uncertainties, and we ask readers to refer to the brief notes on the settlement of accounts and securities report of the Bank for more details. The Bank will not update the forward-looking information contained in this material.